CIBC FX Flows: FXWW

From the FXWW Chatroom: Believed to be the work of Japanese retail sector, EurJpy got a lift before traders got in. The cross advanced to 133.38 and took UsdJpy above 113.00 but ran into some resistance. EurJpy needs to break 133.50 while UsdJpy has to clear some thick offers in the 113.30’s. EurJpy stayed bid, EurUsd took out some very weak stops above 1.1810, UsdJpy has backed off to low 112.90’s.
Australia’s Sept labour report exceed expectations – gave AudUsd a boost to 0.7872. But traders are cautious ahead of New Zealand coalition results. Gamma play is said to dominate topside in Aud, 0.7895-0.7905. We tried topside twice past week and failed. Usd got a small boost and AudUsd drifted to 0.7850.
Stop loss orders triggered in both EurUsd and GbpUsd, above 1.1810 and 1.3220. Some guys will be watching 1.1822 in EurUsd, the 61.8% Fibonacci retracement. Not a lot in options space, there is a Eur1.4bn strike at 1.1800 maturing tomorrow New York cut.

Report in The Telegraph said Prime Minister Theresa May will address the EU leaders on Thurs night at a dinner ahead of the key summit in Brussels where EU leaders will gather to discuss Brexit negotiations. In the report, senior British MPs warned that Britain must be prepared to walk away from the EU and stop negotiations if European leaders do not agree to trade talks. The newspaper said EU leaders will tell PM May Britain must agree to pay some money into the EU budget until 2023, rather than 2021 under the current offer, before there can be any movement on trade talks. EU leaders will also meet Labour leader Jeremy Corbyn in Brussels before their audience with PM May. In a separate report in The Times, EU officials are demanding an extra Gbp6bn to the Brexit bill, due to pension liabilities for retired EU officials. This issue is expected to be discuss at the dinner later today with PM May.

Not much on UsdCad, the pair tracked the Aussie and Usd move. Bids linked to option structures reported on the downside. Some talk of option-related offers above 1.2480, well there is a 1.2500 strike maturing today for $900mio.

Asians
Onshore USDCNY is bid. The pair opened at 6.6268, which was in line with previous day’s closing. But strong demand took the pair on CFETS to 6.6373. Offshore naturally higher. Resistance in USDCNH 6.6395. While CNH forwards have been calm, the 9-month points moved higher from 1130 to 1160.